Paul Krugman — economic crank

More evidence. Dr. Krugman from puberty has approached the problems of economics from the anti-matter negative of the actual nature of the problem at hand — from the perspective of magic and impossible fiction, and not from the perspective of the actual, non-fiction world — a world of limited knowledge, scarce production goods, and limited but spontaneously achieved coordination.

Krugman inhabits a world where scare production goods, limits to knowledge, and the problem of coordination do not exist.

Wealth is created when the government issues debt — and channels resources away from investment into consumption. The coordination of scarce and heterogeneous production goods by folks with prices, profits, and loses as guides doesn’t enter the story.

Wealth is created again when the governments and individuals default on their debt or inflate it away — and once again rewards consumption and penalizes saving and investment. And, yet again, the coordination of plans, profit and loss statements, and production processes never enters the picture. It’s all about “the beauty of pushing a button to solve problems.” But, of course, solving the coordination problems of the market and husbanding productive resources in the process has nothing to do with “pushing a button to solve problems.” Only an economist inspired by the impossible “physics” of science fiction would be such a child as to give advice to the community based on essentially just such a premise.

Most of Hayek’s career in economics was devoted to weaning economists and the public away from a push button, science fiction view of the economic problems of society — he showed how push-button socialist planning was impossible — a pure fiction, how push-button Keynesian demand management was impossible — a pure fiction, how a push-button Fisherian “stable price” regime was impossible — a pure fiction, and how the prediction of individual actions (no matter how many buttons are involved) was impossible — a pure fiction, etc.

Random Quote

.. that central question of all social sciences: How can the combination of fragments of knowledge existing in different minds bring about results which, if they were to be brought about deliberately, would require a knowledge on the part of the directing mind which no single person can possess?— F. A. Hayek